I have been looking at corn, wheat and soybeans for a few days. After a bearish USDA report last week, all three had big down days. Corn broke out to the downside but the wide spread and the technicals meant that I couldn’t get a good entry point, so the potential return didn’t justify the risk of shorting it. I went long wheat, got stopped out, and then tried to go short but didn’t get a chance as the market ran away. Soybeans broke out to the downside (from a previous uptrend) but immediately hit the 200-day moving average (on the front-month chart, not the price of March soybeans). I don’t like trading close to 200-day moving averages — markets stick to them and you can’t tell what is going to happen. However, soybeans broke sharply downwards away from the moving average yesterday, and I thought I would experiment with using that as a technical signal. It appears to be working so far. The continued downward momentum in corn and wheat also seems supportive of this trade.

Lines show approx stop and entry levels.

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